US MORNING REPORT (5.15am AEDT)
In US economic news, non-farm payrolls rose by 113,000 in January, short of forecasts for a gain of 185,000. But private payrolls rose by 142,000 and the unemployment rate fell to a five-year low of 6.6%. Average earnings rose by 0.2% as expected. Consumer credit rose by US$18.76 billion in December, above forecasts for a gain of US$12 billion.
European shares rose on Friday. Investors bet that US jobs growth would lift in coming months while they appeared less fearful about prospects for emerging nations. An upbeat outlook from ArcelorMittal boosted mining companies. The FTSEurofirst 300 index rose by 0.8% with the UK FTSE up by 0.2% and the German Dax higher by 0.5%. Mining shares also lifted in London trade with BHP Billiton shares up by 1.3% while Rio Tinto rose by 2.1%.
US sharemarkets rose on Friday. While job numbers disappointed, traders bet that growth would pick up in coming months. And volatility slumped with the Vix or ´´fear gauge´´ down 11.3%. The US Dow Jones rose by 165 points or 1.1% with the S&P 500 up by 1.3% while the Nasdaq gained 68 points or 1.7%. Over the week the Dow rose by 0.6% with the S&P 500 up 0.8% and Nasdaq up 0.5%.
US long-term treasury prices rose on Friday (yields lower) as job growth disappointed and bargain hunters snapped up stock after big falls over the week. US 2 year yields fell by 2 points to 0.307% while US 10 year yields fell by 2 points to 2.687%. Over the week US 2 year yields rose by 2 points and US 10 year yields rose by 11 points.
Major currencies gyrated against the greenback on Friday in response to US jobs data and ended European and US mixed. The Euro rose from lows near US$1.3550 to US$1.3640, and was near US$1.3630 in afternoon US trade. The Aussie dollar rose from lows near US89.30c to highs near US89.95c, and was near US89.60c in afternoon US trade. And the Japanese yen held between 101.50 yen per US dollar to JPY102.51 and was trading near JPY102.33 in afternoon US trade.
World oil prices rose on Friday. European refiners reduced processing runs; some refiners started to shut down plants for maintenance work; cold winter weather persisted on the US east coast; and the US jobless rate fell. Brent crude rose by US$2.38 or 2.2% to US$109.57 a barrel while US Nymex crude rose by US$2.04 or 2.1% to US$99.88 a barrel. Over the week Brent rose by 3% and Nymex lifted 2.5%.
Base metal prices rose up to 1.1% on the London Metal Exchange on Friday with nickel leading the way while copper, lead and tin rose just 0.2%. Over the week metals rose between 0.3-3.4% with lead up the least and zinc up the most. The gold price rose on Friday with the Comex gold futures up by US$5.70 or 0.5% to US$1,262.90 per ounce. Gold rose 1.9% over the week. The iron ore price fell by 10c on Friday to US$120.90 a tonne and fell by US$1.70 over the week.
Ahead: In Australia and the US no major economic data is expected on Monday.
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